War of the Gargantuas opens with an attack on a small Japanese fishing vessel by a giant octopus. Generally thought of as shy, retiring creatures, this is an octopus with attitude who has decided to take the battle to the fishermen rather than waiting around to be caught in a net. The result is a pitched battle between five fishermen and a number of giant rubber octopus arms. The octopus suddenly breaks off its attack, however when it is threatened by a monstrous humanoid figure. The two scuffle and the octopus is sent on it merry way worse for wear, while the creature sinks the fishing boat and eats most of the crew.

The Japanese authorities call in Dr. Stewart (Russ Tamblyn) to aid in their investigation because he and his pert assistant Akemi (Kumi Mizuno) were experts in giant creatures, even having raised one in captivity. One immediately has to wonder if there is a doctorate program in Japan for the care and feeding of giant creatures. Dr. Stewart examines the remains of the boat where they find chewed clothes and talks to the captain of the fishing vessel who managed to escape and further the story line. Having confirmed that a large hairy giant ate the crew, the authorities are betting that Stewart's Gargantua (which seems to have been released into the wild) is responsible for the attack, despite the scientists' protests that their Gargantua was sweet, gentle, kind, and had a thing for the perky lab assistant.

Soon the Gargantua is sighted in Tokyo bay and in the mountains and the scientists, who are masters of deduction realize that there might be two of them. A third attack, this one at a Tokyo airport, by the Sea Gargantua shows the Gargantua's natural ability to eat around clothes and spit them out when they are done. The attack is cut short however when the sun comes from behind some clouds and drives the Sea Gargantua back into the sea. The Sea Gargantua seems to have a weakness to bright light which will be exploited throughout the movie.

The Sea Gargantua returns this time appearing in downtown Tokyo where he is driven away by the awful singing of a lounge act and the use of said lounge act's lighting equipment. Driven into the mountains, the Sea Gargantua is trapped there by government troops with spotlights. The Japanese then call in their special monster fighting troops that are made up of tank miniatures and trucks carrying really cool guns that shoot lightning bolts. The Sea Gargantua blows off the artillery fire, but the lightning guns have it on the ropes when a second Gargantua appears, this one brown and obviously from the mountains. The Mountain Gargantua saves his fellow gargantua and they flee into the mountains. The scientists come to the conclusion that the Sea Gargantua grew from a piece of the Mountain Gargantua and that the Mountain Gargantua is actually the kind and gentle one they raised in the lab.

The Mountain Gargantua reappears later to save the perky lab assistant and returns to his mountain lair to find that his brother has been busy eating college students. Being good, the Mountain Gargantua will not stand for this and the two begin to battle. They hit each other with trees and eventually destroy half of Tokyo during their fight. Their battle continues into Tokyo bay, where the Japanese military unleash Project: Let's Make A Volcano Because That Will Destroy The Battling Monsters Who Threaten Our Way Of Life (you have to give it to the Japanese military for being prepared for every contingency). Their plan works and the two Gargantua are destroyed.